A Guide To Employee Referral Programs: Benefits, Tips, And More

The hiring process for any company can be daunting as it is time-consuming, and various things need to be considered. Finding the right candidate for the desired position can be very hectic when you don't utilize the right resources and tools. A referral program can be a great way to find the right candidate and make the process much faster. So what are employee referral programs? And what benefits can you expect from them? 

Read this guide to find out what are employee referral programs, the benefits of referring people for job offers, tips to excel, and much more.

What are Employee Referral Programs?

Employee referral programs are a process in which employees are incentivized to bring their colleagues on board. These programs benefit employers in several ways, including increasing employee engagement, reducing turnover, and generating higher productivity.

As a result, employees are rewarded for referring colleagues to job opportunities, which can be a great way to build relationships and create a positive work environment.

Why Do You Need Employee Referral Programs?

Employee referral programs are a great way to recruit suitable candidates. They allow you to attract candidates who would have otherwise passed your job opportunity by providing them with a personal recommendation. They also offer a reliable stream of new candidates, allowing you to build a larger, more diverse candidate pool. 

Most importantly, they generate a positive brand image for your company. With a strong referral program, you can harness multiple benefits for your employees. Read on to find out more.

Benefits of Employee Referral Programs

1. Enhances the Caliber of Hiring

One of the enormous benefits of employee referral programs is that they can help you improve the calibre of your hiring managers. When you rely on referrals and recommendations to hire new employees, you can attract better candidates by building a more robust candidate pool. 

It allows you to improve the calibre of your hiring managers, which can significantly impact your company's productivity. It can also help reduce turnover, as employees are more engaged in their job when they feel they have a say in who is joining their team.

According to a report published by LinkedIn, getting recommendations is the most common way for people to find employment. Additionally, by utilizing their employees' social networks, businesses can multiply their talent pool by a massive amount.

The report also reveals that employee referrals are the best way to find qualified hires.

2. Cost-Effective Hiring Solution

Hiring new employees can be extremely time-consuming and stressful. Employee referral programs can be a great way to solve this problem when you feel like you are losing productivity due to your current hiring process. 

Employee referral programs are a cost-effective solution to this problem, as they can help you to reduce turnover and save money. As a result of moving through the hiring process more quickly, you also naturally lower the associated costs.

It is because employee referral programs allow you to develop a diverse candidate pool, which can help reduce the amount of time you spend on the hiring process.

Another report by Recruiter.com reveals that companies that adopt the employee referral program as their primary hiring strategy can save more than $3000 per hire.

3. Increase Retention Rate

Employee referral programs are a great way to improve employee engagement and reduce turnover. By allowing employees to refer their colleagues to job opportunities at the company, employee referral programs build relationships at work, which can help to increase employee engagement. 

Additionally, when employees feel they have a say in who is joining their team, they are more likely to stay at the company. It is because they feel invested in the company, which makes them more likely to put their best foot forward.

Compared to corporations that use career sites, companies that use employee referral systems have retention rates that are, on average, 46% higher - Recruiter.com.

4. Increased Employer Satisfaction

Employee referral programs are a great way to improve employer satisfaction, as they allow you to build a strong brand image for your company. Employees who are happy with their job are more likely to recommend your company to their friends and family. 

It can have a significant impact on the quality of candidates that can apply for your job opportunity. In addition, when employees are satisfied with their job, they are more likely to give their best on the job.

Employee Referral Program Tips

1. Describe the resources needed for hiring.

• First, describe each resource you would need for recruiting, including an explanation of what you plan to do. For example, if you have specific expertise in working with a particular candidate's skill set, include that information here. 
• Second, describe the resources needed for screening resumes, including the type of screening you have in place and the number of people you plan to screen. 
• Third, describe the resources needed for interviewing, including the number of people you plan to interview.

2. Elaborate Job Description with Clarity

Job descriptions are a great way to communicate the essential responsibilities and skills required for the position to the hiring manager. They are often one of the first things that candidates see when applying for a part, so it's crucial to write a job description that is clear, concise, and compelling. 

While a job description is often lengthy, it's essential to keep it short and to the point. The goal of a job description is to communicate the critical requirements for the position to the hiring manager, not to go into great detail about the job.

3. Incentivize Employees to Make Referrals

Incentivizing employees to make the best referrals is a great way to increase participation in your employee referral program. Offer employee referrals a reward, such as a gift card to the coffee shop across the street or a day off, for making the best referral. 

It will increase participation, as employees interested in the reward want to make the best referral possible. When making the best referral, be sure to thank the employee for their time and let them know about the reward offered for the referral.

Employee Referral Program Examples

1. Google - Ask Simple Questions

When we look at Google's referral program, the two words that come to mind are straightforward and concise. Google recruiters use aided recall to ask staff members simple questions like, "Who is the best product person you know?"

Employees who recommend candidates are typically a good fit since employees are challenged to think more deeply in such a method with direct questions.

2. Salesforce - Happy hours

Regardless of the outcome of the hiring, the company gives meaningful presents to every employee who recommends a candidate. Given that current employees refer more than half of new hiring, the Salesforce strategy has been rated successful overall.

3. Hewlett Packard (HP) - Recognize the Public

Hewlett Packard is aware of this and has incorporated the concept into its employee referral program by publicly thanking staff members who successfully refer new hires. Publicly expressing gratitude to employees makes them role models for other staff members and inspires them to perform better.

The Bottom Line

Employees who advocate for your brand build credibility, gain trust, and ultimately increase sales. Pitch N Hire has made it easy for employees to refer friends and family by providing them with various referral rewards. These rewards are tailored to the needs of your employees, allowing them to choose tips they will be most excited about. 

Promote your employee referral program within the company and inform your employees that they will be rewarded for referring friends and family members. So what are you waiting for? Start your employee referral program today with Pitch N Hire!

Also Read: Intake Meetings As A Recruiter

Related Posts

• High-volume recruiting